Maintaining double-digit performance growth, FINV.US's generous dividend payments exceeded market expectations.

The Zhitong Finance App learned that on March 19, Xinye Technology released its financial report for the full year of 2023, achieving a double increase in revenue and profit, operating income of 12.55 billion yuan, a year-on-year increase of 12.7%, net profit of 2.38 billion yuan, and a net interest rate of 19%. During this period, the transaction volume reached 194.3 billion yuan, an increase of 10.8% over the previous year. Among them, due to strong overseas business, the transaction volume increased by 84.7%. As of the end of December, the loan balance was 67.4 billion yuan.

Additionally, the company has approved a cash dividend of $0.237 per share of American Depositary Shares (ADS) for fiscal year 2023, for the sixth consecutive year. Based on current market capitalization, the company's dividend rate is 5% in terms of payouts, which is 11.76% of market capitalization based on repurchases plus dividends. Xinye Technology is a technology-driven company. Under the global market strategy, it has achieved high-quality growth. The compound revenue growth rate in the past five years has reached 20.45%, and it also pays dividends every year to actively return shareholders and share the company's development results.

Steady growth in performance and acceleration of globalization strategy

Xinye Technology empowers the digital construction of the financial industry, and is committed to promoting the deep integration of digital technology with the real economy, and serving the digital upgrading and high-quality development of financial institutions. By the end of 2023, the company had served 94 financial institutions and provided credit technology services to nearly 30 million domestic and foreign users, leading the loan scale in the industry, reaching 194.3 billion yuan in 2023, and maintaining a growing trend.

Thanks to the continuous growth in loan size, the company's revenue scale also continued to reach new highs. The monetization rate (revenue/loan amount) in 2023 was 6.46%, and remained stable at 6-7% in previous years.

In fact, the globalization strategy is a powerful tool for Shinye Technology's scale expansion. The company began the internationalization process in 2018, using domestic and international markets as a two-wheel drive strategy. After 6 years of accumulation, the international business has become the second growth curve. In 2023, domestic business revenue was 10.41 billion yuan, up 4% year on year, revenue share 83%, while international business revenue was 2.14 billion yuan, up 85.9% year on year, and revenue share increased to 17%.

Looking at the number of users, by the end of 2023, there were 156 million registered domestic users, up 8.1% year on year, with a cumulative total of 25.2 million borrowers, up 6.8% year on year, and the ratio of borrowers was 16.15%; while 24.6 million registered overseas users increased 58.7% year on year, with a cumulative total of 4.8 million borrowers, up 41.2% year on year, with a borrower ratio of 19.51%. There has been a steady increase in the share of international business borrowers and the amount of loans contributed to.

Xinye Technology promotes a global strategy and adopts target policies according to local conditions. In the domestic market, Xinye Technology continues to target high-quality customers in the consumer finance and small and micro finance sector. Among them, small and micro enterprises are key target customers. In 2023, it has 811,000 small and micro users and individual businesses, contributing to an increase in loan volume to 25%; in overseas markets, in response to the Belt and Road policy, it has established deeply localized fintech platforms in Indonesia and the Philippines, and is developing technology service business in Latin America.

With domestic and international two-wheel drive, performance has maintained high growth, and the company is also actively improving profit levels. In 2023, its gross margin was 83.17%, up 1.54 percentage points year on year. The total three rates (sales, administration and R&D) were 22.2%, down 0.94 percentage points year on year. The net shareholder interest rate was 18.65%, and the ROE was 16.9%. By the end of 2023, the company's cash equivalent had reached $4.97 billion.

AI accelerates the digitalization of the industry, and R&D enhances the level of empowerment

The digitalization of the industry is a general trend in China. The development of AI and the introduction of new quality productivity are accelerating the construction of a digital China. As an important industry serving the real economy, financial institutions are leaders in the construction of a digital China. In 2022, the central bank issued the “Fintech Development Plan (2021-2025)” to comprehensively guide and promote the financial industry to use digital technology to improve the quality and efficiency of financial services.

2023 is the first year of AI development. ChatGPT will push AI applications to a climax. The application of AI models will accelerate the digitalization of the industry. Xinye Technology will increase investment in R&D, especially AI, improve technical standards through industry-university-research, and continuously upgrade the level of digital empowerment of financial institutions, thus attracting more partner institutions and loan users around the world. In 2023, the company invested 510 million yuan in R&D, and the R&D expenditure rate was 4.06%.

Through AI technology, Xinye Technology will continue to upgrade many technical capabilities of dialogue robots in 2023, including AI atomic technologies such as multilingual speech recognition and multi-tone speech generation, and launched the first-generation major language model application development framework E-LADF in the third quarter. At the same time, in order to better cover the global market, the company's multilingual chatbot has covered five languages: Chinese, English, Spanish, Indonesian, and Filipino. The intelligent chatbot covers 80% of customer communication tasks and provides services to more than 20 fintech platforms across six countries.

It is worth mentioning that small and micro enterprises are a huge blue ocean market. More than 90% of Chinese enterprises are small and micro enterprises, but due to information asymmetry, the problem of financing is serious. Xinye Technology is seizing the opportunity, increasing the small and micro market, eliminating the information asymmetry between financial institutions and users through the level of financial technology to meet the financing problems of high-quality small and micro enterprises. In 2023, the company launched the “Hailu Cloud System”, an intelligent service platform for small and micro merchants. The system covers the entire business process of small and micro financial services, improving the digital management level of small and micro enterprises and offline stores. Since the launch of the Hailu Cloud System, it has been recognized by small and micro enterprises, and has provided services to 500,000 users.

With its fintech capabilities, Xinye Technology has enabled financial institutions to digitize, and on the other hand, it has also created greater value for loan users. At the same time, the company has also developed anti-fraud defense technology adapted to domestic and overseas markets to protect consumers' rights and interests. The company uses its accumulation in the field of visual algorithms and graph algorithms to accurately identify and block financial fraud activities carried out by malicious use of generative AI. The recognition accuracy rate was as high as 98.8%, and the recall rate reached 95.3%.

Pay attention to sustainable development, and steady dividend payments are attractive

As a leading player in the fintech industry, Xinye Technology attaches importance to sustainable development. It began issuing its first ESG report in 2018 to implement and integrate ESG strategies into enterprise development. The company puts social welfare first, and has supported poor regions for many years. For example, it has been supporting construction in the Liangshan region since 2017. In 2023, it visited Daliangshan, Sichuan for the sixth time, continued to promote local education assistance, village lighting projects, and delivered school materials, sporting goods and daily necessities for the new semester to the children in the caring kindergarten funded by Xinye Technology.

In addition, the company also attaches importance to consumer protection. In May 2023, the Consumer Rights Protection Committee was established to establish a multi-dimensional consumer insurance governance framework to comprehensively promote consumer rights protection; in March 2024, the first “Consumer Rights Protection 2023 Annual Report” was released, and the “Consumer Rights Protection Zone” was launched, and a “one-stop” consumer rights protection mechanism was established.

According to the disclosure, the company relies on big data analysis, artificial intelligence, voiceprint recognition and other technologies to intervene in suspected fraudulent acts more than 4,000 times per day, block more than 30,000 fraudulent acts throughout the year, and protect users and institutions from losses of nearly 550 million yuan. Over 20,000 suspected black and gray production customers were flagged, black and gray voice pattern information was systematically fed back to the industry's big data system, and nearly 4,000 black and gray production risk alerts were pushed to affected users.

Xinye Technology is one of the few in the industry that can balance performance growth, sustainable development, and steady dividend payments. The company values shareholder returns, stabilizes market confidence through repurchases when the sector is declining, and continuously improves the level of shareholder returns through continuous dividend payments. This year is the sixth year the company has paid dividends, and the amount of dividends has been raised. Under high dividend rates, the company's valuation is highly attractive to the market.

AI is driving fintech into a new blue ocean, the digitalization of financial institutions is speeding up, and Xinye Technology will also accelerate progress with a “global strategy.”